Teva Pharmaceutical Industries Ltd. (Nasdaq: TEVA; TASE: TEVA) has opened the new year positively. Despite falling slightly on Friday, its share price ended last week 4.6% higher on Wall Street. The background is a favorable ruling in a US court, in a lawsuit Teva has been pursuing against generic drug companies that wish to develop generic versions of Teva's multiple sclerosis treatment Copaxone.
Copaxone had sales of $1.57 billion in the first half of 2010. The US District Court for the Southern District of New York denied a motion for summary judgment filed by Sandoz Inc./Momenta Pharmaceuticals, Inc., that the Copaxone patents at issue are invalid for indefiniteness. The court has not yet set a trial date.
Teva Corporate Vice President and Chief Legal Officer Richard Egosi, said, "Teva is very pleased with today's decision, which reaffirms our belief that the patents are valid and enforceable. We remain committed to vigorously defending Copaxone IP rights against infringement wherever they are challenged."
Teva's core activity is generic drugs, but ethical drug Copaxone is estimated to be responsible for a third of its profits. A few weeks ago, Teva's share price fell 9% in one day, when approval for a generic version of another drug stoked fears of imminent approval for a generic version of Copaxone. Analyst John Boris of Citi estimates that, following the latest court ruling, the risk of generic Coapxone is over-expressed in Teva's share price.
Ronny Gal of Bernstein Research says that the current ruling does not relate to the main claim of Momenta and Sandoz concerning the validity of the patent, so that it does not necessarily indicate what the final outcome of the lawsuit will be. However, Gal adds that the court decision boots confidence that no generic version of Copaxone is to be expected soon.
Harel Finance analyst Steven Tepper mentions two additional reasons for the rise in Teva's share price. The first is the rejection by an appeals court of a petition for a new hearing on the legality of an agreement between Teva and Bayer concerning a drug for treating anthrax. The second is the release of the results of a comparative trial by Teva, showing its QVAR inhaler to be efficacious, and sometimes better than competing products.
Teva has a market cap of $48.6 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on September 12, 2010
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